1. Field of the Invention
The present invention relates to methods and systems for facilitating real estate transactions by providing accurate representations of the loans a borrower is qualified to receive, which are based on actual data, rather than estimates. Specifically, the present invention relates to methods and systems for facilitating real estate transactions that provide seamless integration of actions required for completing the real estate transaction, from entry of the borrower information, to the closing and funding of the loan.
2. Background of the Technology
There exist in the art paper-based methods and systems for completing financial transactions, such as mortgages, but typically these systems are inefficient, costly, and add significant overhead to the transaction. Currently, the parties to a transaction inefficiently transfer the necessary documents to complete the mortgage transaction. Usually, all involved parties receive a new set of documents each time the transaction is altered. Most transactions are currently completed by transferring new sets of documents by hand. The systems that execute document transfers electronically typically do not integrate sub-transactions required for the completion of the transaction, but instead require either a separate process to convert electronic data between forms, or hand transcription of data from one form to another. Since a mortgage transaction generally involves multiple parties, the resources needed to complete the transaction quickly accumulate.
For the purposes of this application, “financial institutions” include banks, investment companies, real estate lenders, investment and holding companies, and any commercial entity engaged in the business of financing loans or mortgages. “Brokers” include brokerages, real estate agents, corporate land purchasers, and any commercial entity, individual or otherwise, engaged in the business of buying and/or selling real estate. “Potential borrower” or “borrower,” and “potential customer” or “customer,” are used interchangeably herein to describe any person, including agents of the person, seeking to acquire a mortgage or loan, e.g., by employing the services of a broker or financial institution.
A sub-transaction, also interchangeably referred to herein as an order or product, relates to goods or services being provided during the life of the underlying mortgage transaction. Sub-transactions define the parameters of the transaction or otherwise bring the underlying transaction to completion. Sub-transactions include transactions between the end users of the system (e.g., brokers, financial institutions and potential borrowers) and vendors, such as inspection companies or closing companies that have service agreements with end users or other involved parties.
The complicated nature of a mortgage or loan transaction, coupled with the large number of parties that must approve each stage of the transaction, creates difficulty in keeping all parties properly updated. Presently, involved parties receive updated paper copies of the transaction every time a component of the transaction is altered, or the status of a sub-transaction is changed. Additionally, it is difficult for the parties to check the status of a transaction component until they receive actual notification that it has been changed. This lag time in notification may lead to a party entering a sub-transaction based on dated information.
Computer-implemented systems to manage financial transactions are known, but these systems typically do not manage most of or the entire lifespan of a mortgage transaction. As a result, the integration of various actions and sub-transactions of a mortgage transaction must either be done by hand, or through the use of systems that are either completely incompatible, or, require the input of incompatible data. The problem is further compounded because, as a mortgage transaction usually requires the completion of one or more sub-transactions, each of which may be managed by incompatible or inefficiently communicating systems.
Another problem with completing financial transactions in the prior art is that existing methods and systems for assisting a broker in loan selection lack the capability of providing brokers with accurate representations of the loans for which a potential borrower qualifies. These systems typically only provide an estimation of the types of loans available to a potential borrower, based on hypothetical conditions and/or incomplete or inaccurate data. Brokers often make loan/mortgage decisions without the benefit of all available information. As a result, the broker may fail to obtain the most advantageous loan for the potential borrower, or the broker may fail to obtain a loan for a qualified borrower, costing the broker time, unrealized commission fees, and possibly loss of business. This creates problems not only for potential borrowers, who may receive less favorable terms on their mortgages, but also for brokers, who cannot secure the best loans for their clients. Another result of this problem is that financial institutions may experience more defaulted loans and fail to take full advantage of opportunities to purchase favorable loans.
Yet another problem with financial transactions of the prior art is that financial institutions typically do not purchase loans directly from brokers, because systems that allow direct cost-effective purchasing of loans are not currently available. Attempts by financial institutions to purchase loans from brokers have been largely unsuccessful. There exist in the art methods and systems for third parties to purchase loans from brokers, to package the loans together, and to sell the packages to financial institutions. These third parties, also known as congregators, purchase individual loans from brokers, then combine the individual loans into packages for sale to financial institutions. This process increases the loan processing costs due to congregators' fees.
There is an unmet need in the art, therefore, for methods and systems that provide brokers with an accurate representation of the set of loans for which a potential borrower qualifies. There is a further unmet need in the art for methods and systems that allow seamless completion of various sub-transactions related to a mortgage transaction.
There is a further unmet need in the art for methods and systems that manage mortgage transactions by integrating all or most related sub-transactions, so that one central system contains all existing information about the status of the associated sub-transactions. Additionally, there is an unmet need in the art for methods and systems that have the capability of identifying the order in which related sub-transactions must be completed for the primary loan transaction, and for automatically completing the sub-transactions.
There is a further unmet need in the art for automated loan purchasing functionality that enables financial institutions to purchase, or facilitate such institutions' purchase of, loans directly from brokers, and brokers to solicit loans directly from financial institutions.
There is a further unmet need for a system that is tailored to the needs of individual brokers, allowing design flexibility and customized design based on the specifications of individual brokers.